COLLEGEVILLE —Dow Chemical Co. has finalized a long-term lease on 800,000 square feet of space at Pfizer Inc.’s campus here in what is one of the largest lease deals to be struck in the suburban office market.

The two companies are not disclosing much about the arrangement, but the lease had been in the works for a while and was just recently wrapped up.

The space Dow will occupy was vacated by Pfizer after it acquired Wyeth and inherited its 1.1 million-square-foot campus at Routes 29 and 422. Pfizer closed the research-and-development facilities here and beginning in 2010 has been trying to lease out 480,453 square feet of its unused lab space.

Dow reportedly jumped at the chance to lock in a large block of modern office and state-of-the-art lab space, according to people familiar with the lease.

“Pfizer has informed its colleagues that a tenant will be moving into the vacated space of the Collegeville campus and an official announcement will be made by the tenant in the coming months,” said Patricia Kelly, a Pfizer spokeswoman, in a statement. “While Pfizer is maintaining its presence in Collegeville, we continue to evaluate our global real estate portfolio to best support the business.”

Dow is going to use the space to reportedly relocate operations it maintains in Spring House, according to sources with knowledge of the situation. The distance between its Spring House operations and the Collegeville space is just under 30 miles.

Dow’s advanced materials division is located in Spring House on a 140-acre campus at 727 Norristown Road that has 11 buildings totaling about 600,000 square feet. Rohm and Haas Co. originally bought the property, which had been a farm, in 1961. Rohm and Haas initially constructed three buildings and opened the facility in 1963. Additional structures were added in the 1970s and 1980s. Dow bought Rohm and Haas in 2009.

The Spring House research facility had at one point faced some controversy. Beginning in August 2005, complaints were filed relating to brain cancer incidence among employees who worked at the campus. Epidemiology studies were launched and they concluded the number of employee deaths, and in particular deaths related to brain cancer, showed no statistically significant increase when compared with rates both in the general U.S. population or in Pennsylvania.

The Spring House campus has roughly 900 employees working from it, according to the Dow website.

Dow wouldn’t confirm it took space in Collegeville. The company limited the information it released to a statement.

“Dow is committed to maintaining a strong presence in the region, and to securing a facility that will strengthen and facilitate growth of its Northeast R&D hub,” said Barbara DelDuke, spokeswoman for Dow. “Currently, the Rohm and Haas Spring House Technical Center remains under ownership of Dow and is operating as normal. An official announcement regarding the location will be made in the coming months.”

Some speculate Dow will eventually buy the Pfizer property and sell its Spring House facilities.

The Spring House complex is used for a range of research including the invention of the acrylic technology supporting acrylic latex paints, water purification products, polymers used in laundry detergents and cosmetic products, including shampoos, lotions and conditioners. Spring House houses Dow’s Paint Quality Institute.

Mega leases such as this are rare. The sheer size of this one is noteworthy for the local real estate market. Some examples of large deals include Endo Pharmaceuticals’ signing last year to move into a newly constructed 350,000-square-foot complex in Malvern. In 2006, GMAC Mortgage entered into a 450,000-square-foot lease in a new headquarters in Fort Washington. Shire Pharmaceuticals is now searching for roughly 500,000 square feet.

“The big deals are easier than the little ones,” said Jeff Mack, a broker with Newmark Knight Frank Smith Mack who has been involved in pulling together such leases though was not involved with the Dow deal. “The larger deals are driven by senior management of companies, such as the CFO or general counsel and these folks are experienced in running a larger organization and are also very well organized. They sometimes handle multiple facilities.”

With a large organization, it sometimes takes two to three years to plan for a major move. An analysis of where current employees live is factored in and that takes time to assess. If it happens to involve constructing a building, 12 to 18 months is allotted for that, Mack said. When it’s existing space, a tremendous amount of advanced planning is done especially if a company is consolidating multiple sites. In those cases, companies move in phases.

nkostelni@bizjournals.com | 215-238-5139

Natalie Kostelni covers real estate and economic development.

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